Fed’s Daly: Need 'more urgency' on rate hikes
|San Francisco Federal Reserve Bank President Mary Daly crossed wires, via Reuters, during an extended speech towards early Thursday morning in Asia.
The Fed policymaker initially said, “(She) No longer believes that raising U.S. interest rates every other meeting and delaying a reduction in the Fed's balance sheet until later in the year is appropriate, given signs that inflation is broadening and workers are not charging back into the labor force.”
Also read: Fed's Daly: Rates will be moved up this year to a level more consistent with where the economy is
Additional comments
I do think having a little more urgency to moving interest rates up to a level that’s in line with what the economy needs today is important.
Raising rates just once a quarter, as the Fed did after the Great Recession, ‘To my mind doesn’t satisfy the moment.’
Has also pulled forward her preferred timing for starting to reduce the Fed's balance sheet.
Expects the Fed to begin raising rates in March and subsequent meetings by a quarter-of-a-percentage point at a time, but did not rule out bigger half-point hikes if needed.
All of our possibilities are on the table.
There will be more data on inflation and on jobs before the Fed's March policy meeting.
Doesn't believe there is a case for 'frontloading' the Fed's response to inflation, especially since healing supply chains may help slow price rises.
We need to get policy in line but we can’t be impatient about doing it all today.
Market reaction
EUR/USD remains more or less the same after the latest Fedspeak while being burdened due to the risk-off mood. The major currency pair was last seen flirting with the 1.1300, after declining 0.20% the previous day.
Read: EUR/USD falls sharply towards 1.1300 as Ukraine – Russia conflict escalates
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.